Don't get caught out by rising energy prices

29 November 2010

As the big chill spreads across the UK, this winter looks set to be a long and expensive one, with three of the big six energy firms increasing their prices at the costliest time of year.

Last week, Scottish Power kicked off with a 2% rise for gas customers and 8.9% for electricity adding £52 to its average annual bill which now stands at  £1,357.18. Scottish and Southern Energy is increasing its gas tariff by 9.4% on 1 December, while British Gas is upping its gas and electricity bills by 7% on 10 December. Collectively, the hikes will hit more than 14 million households across the UK.

So far, there have been no announcements from E.ON or npower and only EDF has guaranteed it will not increase its prices until the spring. 

Critics have attacked providers for implementing price rises right at the start of the winter, allowing them to cash in at the most costly time of year.

But you don't have to put up with bigger bills. 

The easiest way to cut your bill is to switch energy suppliers. According to there is currently £419 a year between the cheapest and most expensive suppliers, while reckons the average household can save an impressive £333 a year by switching. Opt for an online only tariff and agree to pay by direct debit for the biggest savings.

Mark Todd, director of the company, said: "If everyone switched to their cheapest deal this would lead to a nationwide saving of £6.4 billion and significantly dent suppliers' profits. Energy customers do have a part to play in this and if they switched more regularly that would force the hand of the 'Big Six'. We advise every consumer to do a price comparison once a year to ensure they do not get ripped off." 

It's easy to switch - check out Moneywise's Energy Switcher or any other independent comparison service to see how much you could save. All you need to hand is a recent gas and electricity bill which will provide an indication of your current energy usage and ensures price comparisons are as meaningful as possible.

Once you've found a better deal, simply enter your details and the switching service will handle the changeover for you. The supply will be moved using your existing pipes and wiring and no-one will need to come to your property. All you'll have to do is provide up-to-date meter readings in time for your switch, but your new supplier will let you know when you need to do this.

Some providers offer joining incentives - EDF for example is offering a £100 Welcome Bonus for those who switch to its latest online tariff by 30 November (so you'll have to act fast). However, it always pays to shop around and factor in any bonuses into the overall price you'll pay for the year.

Also check for any clauses that will tie you into the deal - many of the best deals will require to you to pay an exit penalty if you leave within a year.

Switching isn't the only way to save. 

According to the Energy Savings Trust, UK households could collectively wipe £2 billion off their energy bills by taking three simple steps: insulating their cavity walls and lofts, replacing old fashioned bulbs with compact fluorescent bulbs and turning all their appliances off standby.

Philip Sellwood, chief executive of the Energy Saving Trust, said: "There is no getting away from the fact that the UK is facing challenging economic times. But it is also clear that this hardship is making people think more carefully about what they are spending their money on."


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